5 Reasons to Invest in First Quantum Minerals Limited

First Quantum Minerals Limited (TSX:FM) is developing the promising Cobre Panama project for future growth.

| More on:
The Motley Fool

First Quantum Minerals Limited (TSX: FM), Canada’s largest pure copper company, now controls the massive Cobre Panama open-pit copper development project following its hostile acquisition of Inmet Mining in April 2013.

Here is why this development project in Central America is important to the company and why it’s prudent as an investor to consider First Quantum for your portfolio.

1. Cobre Panama’s sheer size and potential

The Cobre Panama project in Colon Province, Panama is First Quantum’s immense copper-gold-silver project. This concession comprises four zones totaling 13,600 hectares.

Cobre Panama is one of the largest and most important private investments in Panama. Once it is in operation, it’s expected to become Panama’s primary exporter with income comparable to that of the Panama Canal.

2. First Quantum’s interest and mine life

First Quantum has an 80% interest in Minera Panama, S.A., which is the Panamanian company that holds the Cobre Panama concession. The life of this mine is estimated to be 34 years.

3. Good accessibility to the project

Cobre Panama is 120 kilometres west of Panama City and 20 kilometres from the Caribbean Sea. The Pan-American Highway system from Panama City to Penonome provides access to Cobre Panama. Furthermore, surfaced all-weather roads to Llano Grande and gravel roads through the town of Coclecito also provide access to the project. The company worked last year on improving access to the site.

4. Capex commitment and Cobre Panama capacity

The company announced earlier this year that it expects to invest $6.4 billion in the Cobre Panama project. The expectation is that the project will be completed in the second half of 2017. For 2014, First Quantum Minerals has forecast approximately $600 million in capital expenditures for the Cobre Panama project. For Q2 2014, the company spent $180 million at Cobre Panama.

This project will have an installed capacity of approximately 70 million tonnes per year for the first 10 years. Cobre Panama can additionally expand to 100 million tonnes per year beyond the tenth year. This project will produce an average of approximately 320,000 tonnes of copper per year over the life of the mine.

5. Efficient development

At Cobre Panama, site accommodation, road access, communications and management are currently all in place and functioning fully. The chief metal at Cobra Panama is copper. Secondary metals at the project include gold and silver, as well as molybdenum.

Big things are on the horizon for First Quantum Minerals and its Cobre Panama project. The company is worth your due diligence as it moves ahead with its enormous development plans in Panama.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Michael Ugulini has no position in any stocks mentioned.

More on Investing

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

Earn monthly cash of $154 with this 8% dividend stock.

Read more »

A miner down a mine shaft
Metals and Mining Stocks

Should Investors Buy the Correction in Lundin Mining Stock?

Lundin (TSX:LUN) stock has fallen by 10% in the last few weeks, but so has the price of copper. Coincidence?…

Read more »

Metals and Mining Stocks

Best Stocks to Buy in May 2024: TSX Materials Sector

A TSX materials sector ETF could help investors gain cheap diversified exposure to the hot sector's stocks – so will…

Read more »

man is enthralled with a movie in a theater
Investing

Should You Buy Cineplex While it’s Below $9?

With analysts expecting a significant recovery in the second half of 2024, is this the last chance to buy Cineplex…

Read more »

oil tank at night
Dividend Stocks

Think Oil Is Going Higher? 3 Dividend Stocks to Buy Now

Looking for steady dividend growth? These three Canadian oil stocks could provide substantial dividend income in the coming years.

Read more »

Profit dial turned up to maximum
Dividend Stocks

This 7% Dividend Stock on the TSX is Worth Watching

With this superb TSX stock now trading at the bottom of its 52-week range, it's certainly a dividend stock you'll…

Read more »

Dots over the earth connecting the world
Dividend Stocks

1 Magnificent Dividend Stock Down 23% to Buy Right Now Near a Once-in-a-Decade Valuation

Patient investors could be happy with this dividend stock a few years down the road.

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

2 TSX Dividend Stocks to Buy While They Still Offer Great Yields

These top dividend-growth stocks now offer 7% dividend yields.

Read more »